tv Professor Discusses Japans Economic Outlook for 2019 CSPAN February 6, 2019 5:44pm-6:50pm EST
he's also been an executive at a marketing firm and a job training company. voters in nevada's third district elected susie lee to house. prior to office, she ran nonprofit organizations. the after school all-stars program ran after school athletic activities and communities in schools of nevada helped prevent kids from dropping out of high school. the next phase is similar across the world but new to congress. utah elected mitt romney to the u.s. senate. before that, he headed up the 2002 salt lake winter olympics. this was his second run for u.s. senate. his first was against the late massachusetts senator ted kennedy in 1994. and utah has a new member of the house. democrat ben mcadams now le s n
representatives the state's fourth district. he's the only democrat in utah's congressional delegation. new congress, new leaders. watch it all on c-span. >> now, a discussion on japan's economic outlook. this is co-hosted by the carnegie endowment for international peace, and the japan-america society of washington. it's an hour. welcome back to the second half. i feel like the middle of the football game and now we're ready to begin. and we've got a great way to kick off the second half. before we turn it of to our keynote speaker, it's my pleasure to introduce the interim president of the japan-america society of washington, d.c., abigail
freeman, the founder and ceo of wisteria group, consulting firm and previously she was senior adviser to the asia foundation, where she led strategic engagement on japan and advice of other conflicted regions in asia. she had a long career at the state department, and she's been a terrific leader and great to welcome her here. [ applause ] >> thank you so much. it feels odd to introduce the introducer. thank you for coming here today. we've got a great speaker who many of you already know, because he's had such an illustrious career in the economic front. he will be speaking today about asian dynamics in 2019. he's currently the representative director of
arena, the economic can research institute for northeast asia, based in niigata, which i find interesting because so often we just see things happening in tokyo or washington, d.c. but having someone based in a perspective outside of the main city is great. he's also a professor -- he's a representative director of the economic research institute of northeast asia, but also a professor at the graduate school of public policy at the university of turkeokyo. he served as the deputy minister of finance. he's a tstanford university graduate with a ph.d. and masters in finance. and he began his career at
brookings. and then he was an assistant associate professor in the economics department at johns hopkins. afterwards, he was a full professor at the university of tokyo and served during this time as a consultant. at the board of governors of the federal reserve system and the imf in washington, d.c. he's worked as chief economist for the world bank's east asia and pacific region from 1998 to 2001. and then subsequent to that, he was with the ministry of finance, the japanese ministry of finance. he served as head of the regional economic integration, and special adviser to the adb president. he's published a number of books and numerous articles on economic globalization, regional financial cooperation in east
asia, including lessons from the asian financial crisis and on the international currency system. so i think you can see from this brief bio, that he's really covered all the bases along the economic front and international trade. so please join me in welcoming mr. kawhi. [ applause ] >> good afternoon. it's a great honor and a pleasure for me to be here, to talk about the japan-u.s. economic relations. and the future of tpp. i think i want to get a bit
closer to the slide, since i cannot -- i don't have it just right in front of me. maybe the best way would be to -- this way -- okay. thank you. very much. so, president trump withdrew from tpp on day one or two, after assuming his presidency. and japan started to lead negotiations on tpp 11. chancery was then the largest economy among the 11 countries,
so japan was a natural leader to do so. in the meantime, mr. trump started to on trade issues to reduce trade deficits and particularly he focused on china. he has been very tough on china or people around him were probably tougher towards china. mr. trump himself. but, mr. trump also wants to forge fda's with or trade agreements with the eu and japan. it could be very favorable. from the u.s. perspective. he had been using the threat of
imposing additional tariffs on automobile imports. japan no started to work with other 10 countries within the tpp 11 context to expand membership. japan also came up with an epa economic partnership agreement with the eu. this epa is going to be enforced on february 1, this year. japan has also been working with other east asian countries to forge the regional comprehensive economic
partnership agreement. so, japan and mr. abby have been working intensively on fda's supporting the liberal trading system for the or not only japan but for asia and the world. the question is where do we go from here? we know the u.s. has the largest trade deficit with china followed by the eu, mexico and japan. according to the number four 2017. japan's trade surplus against the united states is not too
gigantic in comparison to china's. but still, mr. trump wants to reduce the deficit. japan has been pursuing its own fda strategy and economics as part of growth strategy. and the japanese government has been making it clear that maintaining the rules-based liberal and multilateral world trading system another wto would be the most important strategy for japan. for that purpose, japan has been working with the eu, other
g7 countries and like-minded countries to support the multilateral trading system. japan has been -- japan has continued to try to convince the u.s. to return to this multilateral trading arrangement. the u.s., mr. trump has complaints of wto practices and of course wto has many problems and together with the u.s., it's very fortunate that mr. light eyes are does support wto reform and japan, the eu and the u.s. have been supporting
wto reform. another important piece of the strategy is to convince china to return to reform and opening policy. it's recently reversed to a small closed nature it was so successful. and to shift away from the so- called state capital is a model through the market oriented open economy government model. also, implementing several mega fda's has been very important. that's why he wanted -- mr. abe wanted to revive tpp after mr.
trump's withdrawal. the data in the table is old but even though japan has been integrating with many other asian countries in terms of people's movement, trade, or indirect investments the role of china for that matter has become very important and the economic relationship with our okay continues to be important but you realize the u.s. are very important economic partners. for outbound international tourism and trade and direct investment. the u.s. is there economically,
in japan. mr. abe came up with a kpi key performance indicator with regards to fda strategy. mr. abe wanted to achieve the fda trade coverage ratio of 70% by 2018, last year. this was not achieved, but still, this policy continues to be important. so, to achieve it japan has to forge an fda with tpp 11 member countries in the u.s. also and you which would be realized
very soon. and then korea and china. so working with many countries continues to be quite important. now, for this audience, i don't think there is really need to reemphasize the strategically him portraits of tpt but i want to say that tpp was high funded fda including developing countries. so, that was very excellent attempt, even by including developing countries, very high standards fda could be achieved and actually tpp 11 has done so. also, tpp was intended to put
pressure on china to further open up and pursue further reform. in the future, china could be invited to be a member of tpp. in essence tpp was a very important instrument to encourage china to go through important structural reforms. but mr. trump decided not to use that. tpp 11 remains significant. tpp 11 was launched by six countries australia, canada, japan, mexico, new zealand and singapore. and also, this month vietnam joined tpp 11.
and three other countries brunei, chile and peru are now going to domestic procedures. malaysia, another country it's a signatory member of tpp 11 is now considering what it should be doing. hopefully, hopefully malaysia soon ratified but we don't know. tpp 11 member countries suspended 22 provisions. i have a list of suspended provisions and items under tpp
11. most of the provisions and items suspended are related to intellectual property rights. about half of -- more than half of 20 of this suspended positions are related to intellectual properties. so basically, those provisions which the u.s. insisted on putting in, into tpp which many developing countries and even some developed countries look australia and new zealand were put in place but they were no now suspended. they have been suspended.
even though these suspended items are still tpp 11, it can be a model for the 21st century trade and investment roles. if the u.s. accepts the entirety of tpp, text and does not demand anything more and if the u.s. wants to come back, the u.s. can come back and those suspended provisions would be restored. we may want to discuss later if the u.s. wants to do it. but if the u.s. wants to come back to tpp, will the u.s.
except the existing text of tpp? more likely, the u.s. would like to add something more to the text. then there would have to be a law of negotiations between the u.s. and existing members of tpp 11. there are still economic benefits to tpp 11, even though the u.s. is not there. so, economic benefits are smaller than tpp, which includes the united states, but still there are economic
benefits. now, membership expansion for our tpp 11. japan and other tpp 11 member countries believe that membership expansion is going to send a strong message to the international community, that these countries really care about trading arrangements and multilateral systems. but there are several issues. there are still countries which have not ratified tpp 11. those three countries plus malaysia.
if a new discussion starts with new potential members than who should be more serious ly negotiating with the new members, all those members, those tpp 11 members which have become legitimate members or would that include other tpp members which have not ratified? those countries which have not ratified may be concerned about new members coming into members of tpp 11 because that make create competitive pressure for countries which have not ratified.
another question, should a very high standard be required in terms of tariff reduction? tariff elimination? if we lose the agreement it's possible. you may remember tariff discussions i done on a bilateral basis. so, between any two countries there may be a law of concessions given to particular countries. so, there is some unknown clarity about the direction
towards tariff or market access issues. although, trading investment rules of tpp 11 have to be accepted by new members. also, it may take some time to finalize tpp 11 expansion. there are several countries which have expressed interest to become tpp 11 members like columbia, thailand, indonesia, the philippines, iran, the uk, china has not as i've said expressed interest but china may be a future member, even the eu. these countries to have various
domestic issues. columbia, after the new government, doesn't seem to be too keen. there is some uncertainty about columbia's direction and thailand and indonesia to go through elections. we have to wait after election outcomes are known. the philippines may be concerned about its economic relationship, economic and political relationship with china under the current president. taiwan has been expressing very strongly to join tpp and also tpp 11 but tpp 11 members may
be concerned about possible conflict with china. remember, in the case of wto entry china insisted that china should end the w to and then taiwan. china and eu may be good candidates but is it really a good idea to invite them in the absence of the united states? so, there are many, many issues to think about. prospects for the regional comprehensive economic
partnership, it's among 16 countries. 10 are member states japan, china, career, india, australia and new zealand. it's not as ambitious as tpp or tpp 11 but it's a very important mega fda, because it doesn't include china and india. china, india and also a large country like indonesia. differences among the major countries are large. initially, between japan and china on the level of tariff reduction and trade and investment rules but after the start of u.s. china trade war,
china has suffered. china once to send an economic friendship within neighboring countries. but, india has been reluctant member. also, it generates a law of economic benefits mainly because china's level of protection is still high in india's level of protection is very high. as the negotiations out of the total 19 chapters, seven chapters have been basically
agreed on going on but there are chapters which are market access issues, in particular india is very much afraid of the negative impact of trade on domestic industries because cheap chinese products are now flowing into india and india would be further exposed to chinese products. intellectual property, e- commerce, these are difficult issues and differences in views among countries. the negotiation will likely be
concluded this year. china softening position and of course it depends on india's election outcome. hopefully, they will continue to be supported in this term and can be more forthcoming because a law of time, more time and leeway provided to india. after all, india has kept the gdp at the same as com the countries. treat india just like cambodia and laos.
so india should be able to come. my paper contains other chapters and progress made highlighted is a difficult part. the next likely steps for tpp 11 is now in grace and a law of our progress is being made on asset which would include as i said, china and india. now, in a minute or so what are the prospects of dag or u.s.
jta negotiations. japan calls japan u.s. trade negotiation, tag trade agreement on goods. the u.s. calls it u.s.-japan trade agreement. there is some difference in the approach. major issues between the u.s. and japan are autos and agricultural sector problems. the u.s. runs large trade deficits in automobiles. accounting for about three quarters of total u.s. bilateral deficits these are in
japan. i have some data. automotive vehicles parts, engines have a trade deficit for the u.s. of $53 billion. the total trade deficit on goods for the u.s. costs about $70 billion. so, the automotive part is the most important part. so, mr. trump wants to reduce this deficit. but that's very difficult, japan imports very small amount of american automobiles. and japan exports a massive amount, how can this be
adjusted? it's going to be very difficult. the cultural trade is an important part. the u.s. runs a surplus on goods and the u.s. wants to increase this part of trade surplus on agricultural product. also, the u.s. is indicating a possible currency clause. looking at the new nafta arrangement and the ongoing discussion about the nature of the u.s.-eu trade negotiations, the u.s. could demand a law of things.
so, there are several key issues for the u.s.-japan negotiation from the japanese perspective there are several things that should be avoided. very restrictive trade policies against japanese auto imports. this is something that needs to be avoided. like increasing tariffs, mr. trump threatens. or setting new medical limits on imports of japanese autos, in a binding way. in the case of new nafta it's not binding but in the future the limit may bind. we are very concerned about the introduction of binding limit.
or the u.s. may want to set a very high roots of origin requirement for auto trade between the two countries. in the case of new nafta, agreement the rules of origin requirement was increased. currency which may have the implication for policy should be avoided because japanese policy continues to be expansion only and there is no possibility at this point to exit from this ultra easy monetary policy. it's very vital for japan to maintain independent monetized policy.
japan will be ready to accept a comprehensive fda deal, not simply on goods but investments and other issues. japan can import more safe gas and earlier there was a discussion on the imports of equipment which in japan it's doing. japan can further open the agricultural market to the extent of original tpp and japan-eu-epa deal. maybe japan could go a bit more, if necessary. japan can invest more in auto plants in the united states to expand automobile industry capacity in the united states.
my conclusion is mr. trump has been very tough against china, but so far against canada, mexico, the eu and japan, the u.s. has been less tough which is good. but the u.s., eu and japan need to make a concerted effort to work on china, to induce changes in china. the u.s. must work with the eu and japan and other like-minded countries. also, they have to work together to implement wto reform and an effective way but
of course this process would have to involve china. japan and other tpp 11 member countries will start membership expansion. japan, china and other members will likely reach an early conclusion of asset this year. japan can contribute to the u.s. economy by keeping to try to convince the u.s. of the free anti-multilateral trading system is best and by purchasing more goods from the u.s. and investing more in the auto and other key
manufacturing sectors in the u.s. of course, japan and the u.s. share common interests, going beyond bilateral trade. china's change, china's reform not korean issue and free and open indoor pacific initiative to give economic substance to this end out pacific initiative would be important. thank you, very much for your attention. >> [ applause ]>> thank you, so much professor
that was quite excellent. i wish we had a crystal ball and we could say what does the future look like for this or for that. we will open up for questions. in the tradition, i will ask the first one. it's been interesting to me to watch the u.s. domestic approach to tpp as we all know was great resistance. this wasn't just something president donald trump was against but there was a bipartisan grassroots opposition which eventually killed tpp for the u.s.. japan historically had a very powerful grassroots lobby that resisted international agreements and get here we now see japan taking the lead on tpp, signing the eu, japan fda
encouraging with are set. what's the magic that's working that is making this possible in japan what's the japanese public reaction to this? what is the business community's reaction? why is this working?>> professor also discussed this issue earlier. japan has two decades of economic stagnation and everybody understands that japan should get out of long- term economic stagnation otherwise the japanese debt would continue to expand through the gdp and social
security could be under stress. to avoid that economic growth is needed. opening market opening and more proactively participating in the global economic management would be quite important and it's necessary. i think that's been accepted by the majority of people. the only sector that has been complaining or i should say almost the only sector is the agricultural lobby. the japanese government has been spending a law of money for tpp itself and japan eu, epa now preparing for tpp 11 and even preparing for the u.s.-
japan-u.s. trade negotiations. in order to give comfort to the agricultural sector a law of fiscal money has been spent. at the same time, a law of reform pressure has been applied to the agricultural sector. the son of former prime minister has been very active on agricultural reform. accommodation has been working very well. the general population of japan is supporting japan's openness.
>> thank you. i won't be selfish. i will open it up to questions from the audience. please. jim. >> jim hmmm well. i thank you for the really good tour of japan's trade policy. my question concerns your comment on tpp or cp tpp expansion when you mentioned that taiwan's succession would be difficult because of china. are you saying that china effectively has a veto power over who joins the organization that it is not in or do you think japan recognizing that cp tpp expansion without taiwan would lead to marginalization of taiwan and that's not in japan's interest so japan will stand up to this pressure. >> ideally, we want china to be
in tpp. we want the u.s. and china to be in tpp. or in the future, sort of reform tpp, if the u.s. wants to come in in the future the u.s. may want to demand a bit more. but in principle, tpp would be very useful for the u.s. and china. so, we want china to be in or tpp 11 will invite taiwan first. it may alienate china and it may give another reason for china to be hostile towards tpp. or tpp 11.
so, that's reality. so, it's not an easy decision but hopefully in the future when china joins taiwan will also join but changing this order can upset china, which we don't want to see. a>> thank you, thank you very much for your presentation. you made a brief reference which was the japan, are okay bilateral trade elaboration, is
that going on, is it alive? where does it fit in?>> thank you, very much. the so-called cj k fda negotiation has been going on but negotiators are now putting a law of efforts on us. the strategy for japan is after arsep , cj k should be more intensively pursued and in a deeper way. going very deep at arsep will be very difficult because of india, because of other countries like cambodia and laos and a few other countries
but on china-japan-korea they can go d. for arsep the agreement may be shallow and not satisfactory from the perspective of economists like myself for many people but first it will be useful to lock in china to a multilateral agreement and seek an avenue for the next step or cj k. there china and japan can talk about much deeper issues reform
issues, e-commerce, international cross-border transfer of data. the cj k would be -- the role of cj k is clearly there. >> thank you. i have a question for the expansion of tpp. you wrote in the presentation that we have a question whether it's appropriate to call china or uk or eu to be part of the membership. i would like to know your
answer and secondly can you say, i'm curious how would be the case that the eu after the brexit to be a member of tpp and eu?. thank you. what percentage? >> i answered on taiwan. taiwan should come after china so that would be a very long- term project. china, this is a difficult issue but we can openly invite china to start negotiation on tpp 11.
i think that would give a good indication about china's willingness to change. we should have many ways to induce china to change through wto reform, through unilateral pressure from the u.s., multilateral process through the lateral process. i think in many ways would be useful using many ways. inviting china to tpp 11 would be one of them. the u.s. may not be happy and enough that poison bill clause, no market economy.
the u.s. may be concerned but this is something i want to advocate. eu, i am more positive towards inviting eu. discussing, connecting tpp 11 and eu and forging a very large fda, a mega fda. hopefully, this would have some impact on u.s. trade policy. to induce the u.s. to think about coming back to multilateral arrangement. so, i think tpp 11 has a law of potential to change china, to
change the u.s.. and in a positive way, we are not destroying the world. we are trying to help reconstruct funeral multilateral trading system for the world. well, i think current tpp 11 members have to start negotiations with several new potential member countries and then the brexit, what's going to happen to brexit has to be observed and of course the uk can be a very strong member country, a strong candidate for
membership expansion and the eu also. i cannot quite assign probability but i hope tpp 11 member countries would consider linking with the eu very seriously. >> professor kawai marilyn myers retired foreign service minister. two questions one is about the trade deficit with japan. i find it striking that 30 years on from when i was in tokyo, auto experts continue to be the bug a bear in the relationship and the answer then was many japanese companies were investing here onto into ohio and toyota went
to kentucky etc. at this point in time can you tell me approximately what percentage of the japanese cars sold in the u.s. market are made in the u.s. versus made in japan? the second very short question is one of your charts shows the difference in projected economic growth, if the u.s. was in the tpp or without the u.s. being a member and it seems the only country rather dramatically that had a much bigger economic growth forecast is the u.s. was not in was new zealand. i wonder if you could comment on why that is so. thank you. >> the first question is what percentage of cars made in the u.s. are japanese cars are made in the u.s. as opposed to made in japan and exported into the
u.s.? >> okay. i think about half. half imported from japan, sorry. about half imported from japan and half imported from canada, mexico and domestically produced. i think that's roughly speaking.>> manny manriquez from is 50% that are sold in the u.s. that are built in the u.s., another 25% or so built in canada and mexico and imported to the u.s. and about the rest of the -- a quarter or 25% pick >> thank you. >> you got the answer right. >> important facts for this crowd to know. >> thank you.
>> some of the major concessions japan made on agriculture products, products where the united states, new zealand and australia are all competitive so by removing the united states particularly japan has quotas and so if the united states does not compete for that quota it's a huge advantage for countries like australia and new zealand. i'm guessing that's the reason for the change.>> thank you>> ugandan a to. >> do we have one more brief question? >> i agree with your agar movement encouraging china for more reforms and especially reforms but when we talk about
it in tpp includes roles of enterprise and property rights and that is actually our issue of our complaint. now, you say many of the rules of the international divides and is so easy are suspended. do you think cp tpp is a good tool to encourage china for reform?>> yes, still tpp 11 would be great. about 11 provisions have been suspended with regard to intellectual property but that's okay. making sure that a level
playing field would be maintained for soe's . subsidies and favorable treatment of soe's should be dismantled under tpp malaysia made a request for a change for the petrol. soa that was the only exception. china may want to ask for exceptions but too many exceptions cannot be accepted and i think tpp 11 is actually, maybe better for china than tpp 12 where the u.s. is in because then u.s. china confrontations
would become the issue. now in the absence of the u.s., china can change in china can show to the u.s. and the rest of the world that china can change. i think that would be very useful. of course over half a year change should take place maybe the subject matter of negotiations. that included if china comes to the table of tpp 11, membership expansion, i think that would provide a very pretty give opportunity for everybody. >> unfortunately, our time is
up. i've really enjoyed this conversation and lecture. please, join me in welcoming and thinking professor kawai. >> [ applause ] jamal, the house ways and means committee holds a hearing on legislation that would require the president and vice president to release their tax returns. president trump has not released his tax returns. before president donald trump, all presidents since richard nixon have publicly released their returns. that airs on 2 pm eastern time on c-span 3 and the c-span radio at. it happens every week that somebody either a famous person or even an ordinary man on the street was getting subjected to social media condemnation just found themselves in the middle of a shame tornado for some
kind of misbehavior either genuine misbehavior or perceived misbehavior and that these pylons are much bigger than they had never been at any time in human history.>> helen andrews managing editor of the washington examiner magazine experienced online shaming. she's our guest sunday on q&a at 8:00 eastern time. it was tough to write this essay because it brought back what was really very troubling and almost traumatic experience in my own life but the hinge event was actually a headline i read in the new york times about a man who had committed suicide in a parked car in the west village and not in found for seven days. this poor fellow had well his the worst moment of his life was when he threw a sandwich at a server at mcdonald's for
giving him the wrong order. she turned out to be pregnant and this funny little story made the local newspapers but it was at the top of his google search for the rest of his life from then on after it happened in 2013. he couldn't get a job because anytime anyone googled his name the funny story came up and so any employer sought i don't want to hire this guy throwing sandwiches at pregnant service and it ruined his life.>> helen andrews on online shaming sunday night at 8:00 eastern on c-span's q&a. from a washington symposium on the history and scope of presidential emergency powers a law professor looks at constitutional issues and how previous president's have used executive power. this is hosted by the brennan center for justice.